FBC Holdings Limited has registered a 3% uptick in profit after tax to $9,6 million for the first half of the year on the back of managing costs despite the group’s revenue for the period being down.
BY TATIRA ZWINOIRA
The rise in profit after tax was from a previous of $9,3 million in 2016 over the same time frame, while total income was down 4% to $45,01 million for the period from 2016’s comparative of $46,64 million.
Speaking to NewsDay Business on the sidelines of their analyst briefing in Harare on Wednesday, FBC Holdings chief executive John Mushayavanhu said containment on the income tax expenses and administrative costs helped counter the lower income.
“I think the main challenge was that reduction in bank charges because we now had to re-strategise and change our strategy. First of all, increase lending and secondly to increase the number of point of sale (POS) machines that we put in the market because income is now going to be driven by fee income due to the number of gadgets that we have.
Also, we had to go all out to register people on our instant card so that they are able to transact so we had to change strategy,” he said.
“Whatever profits we are making, yes we are paying dividends, but we are also able to retain some and plough it back into the business. Also, most of our businesses have remained profitable so the more profit you make, the more you will be able to increase your capital.”
FBC Bank surpassed its capital target with $68,37 million at the end of June from projection of $67,15 and is on course to reach the minimum requirement of $100 million by 2020.
In February, the central bank capped interest rates to 12% from 18% due to the high cashless transaction volumes in the economy which caught FBC off guard.
As such, the net interest income was down during the period under review by 7% to $20,97 million from $22,49 million recorded over the same time frame last year.
The group’s banking division contribution to total income also dropped significantly by 27% from last year’s contribution of 51%. Most of the profit came from the group’s FBC Reinsurance division with 15% from 3% recorded over the same time frame in 2016.
Total assets grew by 11% to $676,6 million from $610,1 million in the comparative period in 2016.
In terms of securities, FBC Holdings increased its Treasury Bills stock by 40% to $105,5 million in the period under review from $75,1 million in the same period in 2016 as it seeks for long-term finance.
Mushayavanhu said they would focus on more cashless solution and introduce 1 000 initial POS machines for the remainder of the year.